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A theory of search with deadlines and uncertain recall

Author

Listed:
  • S. Nuray Akin

    (Department of Economics, University of Miami)

  • Brennan Platt

    (Department of Economics, Brigham Young University)

Abstract

We analyze an equilibrium search model where buyers seek to purchase a good before a deadline and face uncertainty regarding the availability of past price quotes in the future. Sellers cannot observe a potential buyer's remaining time until deadline nor his quote history, and hence post prices that weigh the probability of sale versus the profit once sold. The model's equilibrium can take one of three forms. In a late equilibrium, buyers initially forgo purchases, preferring to wait until the deadline. In an early equilibrium, any equilibrium offer is accepted as soon as it is received. In a full equilibrium, higher prices are turned down until near the deadline, while lower prices are immediately accepted. Equilibrium price and sales dynamics are determined by the time remaining until the deadline and the quote history of the consumer.

Suggested Citation

  • S. Nuray Akin & Brennan Platt, 2012. "A theory of search with deadlines and uncertain recall," Working Papers 2012-3, University of Miami, Department of Economics.
    • Handle: RePEc:mia:wpaper:2012-3
    as

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    File URL: http://bus.miami.edu/_assets/files/WP2012-03.pdf
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    References listed on IDEAS

    as
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. A theory of search with deadlines and uncertain recall
      by Christian Zimmermann in NEP-DGE blog on 2012-07-15 21:31:25

    Citations

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    Cited by:

    1. Brennan Platt & Nuray Akin, 2017. "An Equilibrium Search Model of Fire Sales," 2017 Meeting Papers 949, Society for Economic Dynamics.
    2. Katja Seim & Michael Sinkinson, 2016. "Mixed pricing in online marketplaces," Quantitative Marketing and Economics (QME), Springer, vol. 14(2), pages 129-155, June.

    More about this item

    Keywords

    Equilibrium Search; Deadlines; Uncertain Recall; Price Posting; Reservation Prices;

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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